Brexit Update: The publication of the Draft Withdrawal Agreement

The European Commission recently published its Draft Withdrawal Agreement (“DWA”) for consideration as part of the on-going Brexit negotiations.

The DWA is the European Commission’s interpretation, in legal terms, of the position agreed in the first round of talks with the UK, the ‘phase 1 negotiations’. There are five pages devoted to IP rights, under Title IV Articles 50 through to 57. A link to the full text of the agreement can be found here.

The EU is proposing that, at the end of the transition period, the holder of EU registered rights, such as EU trade marks (including EU designations of International trade mark registrations) and registered Community designs, shall become the holder of comparable UK rights without any re-examination.

Further, the procedure to create the comparable UK rights should be carried out free of charge by the UK Intellectual Property Office using existing data available on current EU registers and without any burden on the owner of the right to undertake any administrative procedure. As would be expected, the filing (or priority) date and renewal date of the new UK right will correspond to those of the original EU right.

In a similar vein, the EU is proposing that the holder of an unregistered Community design right should, after the transition period ends, become the holder of an equivalent right in the UK for at least the remaining term of the protection as would have been afforded under the EU provisions. This would appear to necessitate amendments to the current UK designs legislation to accommodate such equivalent rights.

The DWA also deals with so-called ‘exhaustion of rights’, i.e. the limitations on an IP owner taking action in respect of the use of its goods once they have been sold with its consent. In short, an IP right that has been exhausted in both the EU and UK before the end of the transition period shall remain exhausted in both the EU and UK. For example, if items of branded confectionery are sold with the brand owner’s consent in the EU before the end of the transition period, the brand owner cannot prohibit customers who bought the items from re-selling them to third parties in the UK or EU after the end of the transition period.

Notably, however, the DWA makes no reference to the continued rights of practitioners to act before the EU and UK Intellectual Property Offices.

In a follow-up to the publication of the DWA, the UK Government responded with a speech by Theresa May which referenced the need for IP to be covered in the final EU-UK withdrawal agreement to provide legal certainty and coherence. The Prime Minister also highlighted a desire for there to be mutual recognition of qualifications to enable continued rights of representation of UK practitioners before the EU Intellectual Property Office (“EUIPO”).

This was followed by the publication of a Government note on ‘other separation issues’ which contained specific reference to IP, stating that the UK’s position was, in many areas, ‘closely aligned’ to that of the EU, with an overall objective of providing maximum clarity and legal certainty for users, applicants and right holders.

In summary, the EU’s opening position on IP rights post-Brexit is encouraging and we expect the UK’s position to closely follow the proposals. We expect further clarification in several areas in the coming months.

Theresa May’s suggestion for a mutual recognition of qualifications is welcome and reflects the position of the UK’s Chartered Institute of Trade Mark Attorneys. However, there is a general need for more detail, particularly given an earlier note of the European Commission highlighting the need for UK domiciled parties to appoint a European professional representative to represent them before the EUIPO. In any event, Wilson Gunn will maintain a presence in the EU via its Dublin office and so will continue to be able to represent UK (and all other) companies before the EUIPO, even in the event of a “no-deal” Brexit.

The text of the DWA is now being reviewed by the European Council and the Brexit Steering Group of the European Parliament, before being put to the UK for negotiation. It is therefore not final, and open to change. We will continue to monitor the position and provide regular updates in this news feed.

If you have any questions arising from this article or from the Brexit situation more generally please contact us.